3. FISCAL STRATEGY FOR FISHERIES AND AQUACULTURE

3.1 Tanzania mainland

Objectives

The key fiscal objective for the fisheries sector is defined in the National Fisheries Sector Policy and Strategy Statement (MNRT, 1997) as to "finance administrative, management and development programmes from its own sources" (para 5.1.1).

The policy statement at the same time implies that, in spite of the sector's export and revenue raining potential, this may not however be possible: "It would be unrealistic to assume the Government will finance its programmes...from its own sources in a long term. The...programme...will depend on support from other stakeholders (donors etc)." (para 5)

In practise, revenue generation from the fisheries sector plays an important role not only in the financing of the Government of Tanzania (GoT) programmes in the sector, but also in the raising of revenue for the treasury and local (decentralized) administration. Although the policy statement does not indicate how revenue should be raised, there are several instruments in place which allow revenue to be generated at both local and central levels.

Instruments

Fiscal instruments available to the fisheries sector include:

Table 3 - Principle fiscal instruments (mainland)

¹ The Minister of Finance's budget speech of June 2003 abolished many local government tax instruments, including several that affected fisheries, fish trading and fish processing. Although it can be confirmed that vessel licensing and fish levy continue to be charged, at the time of writing there was uncertainty as to whether other charges had been abolished, or continued to be imposed.

It is notable that all of the above are perceived as revenue raising instruments rather than management measures. Rates of licensing (Appenxi Table 1) have specifically been set so as not to limit the access of national investors to the fishery - should they be used as a management tool to limit access to the fishery it is believed that (especially in the shrimp fishery) this would result in higher foreign participation.

In addition the above, the Tanzania Revenue Authority (TRA) also gains revenue from the sector in the form of company taxation on fisheries related industries. This revenue is however destined for treasury consolidated funds and is not handled by the Fisheries Department. During the course of this study it was not possible to obtain information on TRA revenues disaggregated by sector, and it is not known how much fisheries industries contributes to treasury funds via the TRA.

Aquaculture

Mariculture and aquaculture have received positive support through the Tanzania Coastal Management Partnership (TCMP) which has produced key documents for assisting investors and policy makers, including an Investors Guide (TCMP, 1999a) and an Issue Profile (TCMP, 1999b). In spite of this, there is as yet very little commercial activity in the sub-sector. Administratively aquaculture falls under the Fisheries Department, but they do not have sole authority over all issues. Other sectors include Environment, Transport, Forestry and the Tanzania Investment Centre (TIC). Fisheries policy is to promote small scale production, ecologically sound use of water bodies and maintenance of farm hygiene. Although there is no statement of fiscal strategy towards aquaculture, it seems likely that the Fisheries Department would impose a royalty on exports, just as for fish products from capture fisheries. Current regulations make no exemption for cultured products. The National Environmental Policy requires consideration of environmental concerns in sectoral policies and their coordination for sustainable development. EIAs have proven problematic for previous investment projects in aquaculture.

3.2 Zanzibar

Objectives

There is no clear statement in the current sectoral policy document (RGZ, 1999) which sets out fiscal objectives for the sector. However, the EEZ and coastal fisheries are treated very differently and the FDZ attempts to maximise revenues from the EEZ fishery, whilst treating fiscal measures in the coastal artisanal fishery on the basis of partial cost recovery for the time and effort required to license.

Instruments

The principle fiscal instruments available to the fisheries sector in Zanzibar include:

Table 4 - Principle fiscal instruments (Zanzibar)

Mariculture

The Government of Zanzibar sets out increase the production of seaweed, cultured finfish, crustacean and mollusc species to complement the declining position from capture fisheries (RGZ, 1999). The associated strategies focus upon diversification of mariculture away from seaweed and the improvement of seaweed farming and marketing. So far little has been done in practice to achieve these objectives, and it appears that fiscal incentives do not form part of the instruments which the government proposes to use to try to achieve these targets.